1.1 Business activity

By Published 1. Understanding Business Activity, Businesswidget

Cambridge IGCSE Business Studies 1.1 – Business activity

1.1.1 

  • Needs – Goods or services that are essential for living. These can things such as water, basic food and clothing.
  • Wants – Goods and services that people would like to have but are not essential for living. For example, brand name clothing, expensive food and luxury cars.
  • Scarcity (The economic problem) – Unlimited wants but not enough products. The cause of scarcity is because of not enough factors of production, the 4 factors of production are…
  1.  Land – Natural resources from nature such as trees, forests and oil
  2. Labour – Number of workers available to make products
  3. Capital – Money required for a business to produce items this includes machinery, robots etc…
  4. Enterprise – Entrepreneurs with skills required to create a business.
  • Opportunity Cost – A benefit/value that must be given up in order to achieve something else. For example, if a bakery spends money on a new oven, the opportunity cost of the oven could be a new refrigerator to store cakes.

 

  • Specialisation – Workers/machines specialises in some part of the production process. For example, At a car factory, some workers cuts metal parts, another worker assembles the product and another paints the car. Specialisation can help cut costs and create higher quality products.

 

  • Division of labour – Production process has been divided into different tasks for a specialised worker to work on. e.g. painting cars at a car factory.

Advantages of division of labour are

  • Increased efficiency because the worker does the same task over and over again.
  • Workers don’t waste time moving from one task to another.

Disadvantages

  • Workers may become bored doing the same task which results in decreased efficiency
  • Production may stop if one worker doesn’t do job

 

  • Added Value = Selling price of the product – Cost price (materials etc…)  Value added is the difference between the selling price of a product and the cost to produce it.

Added value can be increased by either charging higher prices for the same product or by reducing the cost of a product by lowering quality e.g. using cheaper materials.

 

 

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71 Replies to “1.1 Business activity”

  5. Preetibah Ravi

    Hello,

    I’m going to do my business paper 1 next week, It would be amazing and really helpful if you could send a pdf consisting all of the notes.

    Thank you.

    My email:

    preeti2703@icloud.com

  21. Joshua

    I’ve created a word document containing all the notes about business studies on Thames notes. Feel free to email me @j99k990@gmail.com for the word document. I will be happy to send it to you

  33. Jain

    could you please any one send me the soft copy of the course of IGCSE O’level 0405 business studies revised the third edition?

  47. Thet Nat Oo

    If these terrific or extraordinary notes for each unit in the syllabus of the business studies subject for all of students who are presently attending this level and calling for and yearning for possessing them perfectly for the excellent distinction (A+)after taking their exams were in the pdf file format, it would be absolutely epic and fabulous for them. For me, I would like to owe them on my device in the pdf version as well exactly like them if you could transfer or export them to my email, eric220106@gmail.com as soon as possible. I truly and genuinely appreciate your enormous and sensational performance from my side in advance since I am urgently calling for them in that version.

    • Thames

      Unfortunately I do not have PDF versions of these notes but you can copy paste it into a word document and export it as a PDF yourself.

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